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County Officials Give LCB Forum To Refute Claims

SNOW HILL – The long awaited meeting between the County Commissioners and the county’s liquor dispensary took place on Tuesday and it was predominantly a one-sided affair, with the Liquor Control Board (LCB) doing the majority of the talking and scolding.

After months of allegations about the LCB’s business practices and questions surrounding the six-figure revenue losses over the last three fiscal years, the commissioners were relatively mute on Tuesday and seemingly took the LCB’s story at face value.

In fact, LCB member and spokesman Larry Wilkinson lashed out at several commissioners saying that he was, “disappointed that certain commissioners chose to speak out publicly against the dispensary without speaking with [LCB officials] first or until the audited financial statements were released.”

There was no mention of the state comptroller’s investigation of the LCB on Tuesday by either side, even though many of the allegations that have been levied against the LCB since April sparked the state’s investigation, which is expected to wrap in December.

Still, Wilkinson compiled a list of almost a dozen allegations that he spoke to and seemingly defended. With the exception of Commissioner Louise Gulyas, an outspoken critic of the LCB, the other commissioners were either satisfied with the LCB’s explanations or they simply sat silent.

“They have fairly and completely answered all the allegations that were printed,” said Commissioner Judy Boggs. “This should be a lesson for anyone that jumps to conclusions too quickly.”

However, Wilkinson went on to pass some of the blame for the dispensary’s profit losses in the last three years, which have dipped almost $700,000, by saying that the dispensary lowered its markup prices at the prodding of the commissioners.

“Over the past two years, some of the commissioners have strongly urged the LCB to make certain concessions to the licensees,” said Wilkinson, “and more specifically in a meeting in the summer of 2008, the LCB was told that it didn’t make any difference if we gave less money back to the county as long as the licensees were getting a better deal.”

Gulyas took umbrage with the LCB’s decision to eliminate the “file-off” discount given to licensees, which has been at 100 percent since 2008.

Simply put, if the LCB gets a sale price on a bottle of liquor, the 100 percent file-off means that the dispensary would pass on all the savings to the licensees.

Now, the LCB will keep all of those savings in order to increase their bottom line.

“You need to stop trying to be a business,” said Gulyas. “You aren’t a business, you are a service.”

“Yes, we are a service, but one that has someone to answer to both monetarily and morally,” answered Wilkinson.

Wilkinson went on to attempt to shoot holes in allegations made by the Worcester County License Beverage Association (WCLBA), particularly President Doug Buxbaum.

Wilkinson spoke to specific allegations surrounding the March Stoli promotion, which the LCB unlawfully offered three different prices to licensees and neglected to offer the deal to all licensees, according to Buxbaum and other business owners, and to an accusation that the LCB illegally gave goods to licensees, in the case, orange crush machines.

“Mr. Buxbaum says that he was never offered the deal in March, but as you can see in the attached email in your commissioners’ packet, we offered the deal to everyone including Mr. Buxbaum,” said Wilkinson. “We did give a number of orange crush machines away, and we feel that we stayed in the legal scope of the law. One of those machines, we actually gave to Mr. Buxbaum, who later called the comptroller on us for doing so.”

Buxbaum said that he and the WCLBA stand by all the allegations that have been made against the dispensary and said he believes that those allegations will be fully addressed in the comptrollers’ investigation.

“I am a bit disappointed that the investigation was not brought up by any of the County Commissioners,” said Buxbaum, “but in response to Mr. Wilkinson’s claims, that email that was sent to me and allegedly all the other licensees gave no mention of the $5 per bottle pricing anywhere in the body of the email. I never got an email or received any word of a $5-a-bottle promotion.”

Buxbaum went on to say that he did accept an orange crush machine from the LCB, but has never used it.

“I had heard they were giving them out so I asked for one, so I could prove it when I notified the comptroller of what they were doing,” said Buxbaum. “It is still sitting in the box.”

LCB Chairman Don Hastings said that without the LCB, the money that the dispensary keeps in Worcester County would all go back to Baltimore, with what he calls the “Monopoly Liquor Lobby,” or in layman’s terms, the wholesale industry.

“In Worcester County, liquor is a good clean industry, and the LCB is an ideal industry for Worcester County,” said Hastings. “We have 31 full-time employees, 5 part-timers, and 12 summer employees. We have a payroll of $1.2 million and that money stays here in Worcester County. If we go away, everyone will suffer.”

Wilkinson also accused the WCLBA of producing skewed documents that showed flawed numbers from the LCB’s financial reports, most notably, payroll raises, and bonuses allegedly given in 2009.

WCLBA officials say that the profit/loss statements that they put together were compiled from the LCB’s internal financial reports that were obtained by the town of Ocean City to try to determine why the LCB’s monetary contributions went down so drastically in 2009.

More interestingly, the commissioners, who are supposed to serve as the lone check and balance for the quasi governmental monopoly, failed to ask any specific questions of the LCB regarding the illegal Stoli promotion and orange crush machine giveaway.

Wilkinson said that the state informed the dispensary that the orange crush machines are deemed by the state to be equipment, and a dispensary is not allowed to give any equipment to a licensee, although the dispensary can give up to $150 worth of promotional products.

In reference to the Stoli promotion where the LCB was accused of charging three different prices to three different licensees on the same day, Wilkinson responded, “we admit that due to extenuating circumstances, we were in violation, and we regret the error.”